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Newfoundland CMHC Insurance

In Canada, homebuyers with less than 20% down payment require mortgage default insurance, or CMHC insurance. Mortgage default insurance protects lenders in the event a home buyer defaults. Thanks to this protection, lenders can offer lower mortgage rates for mortgages with lower down payments.

Ratehub.ca's Newfoundland CMHC calculator


-Down payment
+CMHC insurance
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=Total mortgage
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Jamie David

CMHC insurance premium rates and regulations in Newfoundland are the same in the rest of Canada. Insurance premium rates vary from 2.80% to 4.00% of the mortgage amount. Additional federal policies on CMHC insurance also apply:

  • CMHC insurance must be purchased for all homes with less than 20% down payment.
  • Homes purchased for more than $1 million are not eligible for CMHC insurance, therefore requiring homeowners to put more than 20% down.
  • The maximum amortization period on CMHC insured mortgages is 25 years.
  • Homes sold over $500,000 can no longer be purchased with a 5% down payment. The new minimum down payment is 5% of the first $500,000, and 10% of any amount over $500,000.

The CMHC insurance premium is added to the mortgage amount and is paid off through monthly mortgage payments over your amortization period.

Sample Calculation for CMHC insurance in Newfoundland:

For a $300,000 home with a $40,000 down payment and an amortization period of 25 years. Your insurance premium would be calculated as follows:

  • $40,000 (down payment) ÷ $300,000 (home price)
    = 13.33% (down payment percentage)

  • $300,000 (home price) × $40,000 (down payment)
    = $260,000 (mortgage before CMHC)

  • $260,000 (mortgage before CMHC) × 3.10% (CMHC tax rate)
    = $8,060 (CMHC insurance premium)

  • $260,000 (mortgage before CMHC) + $8,060 (CMHC insurance premium)
    = $268,060 (total mortgage)

You will pay the insurance premium of $8,060 in your monthly payments.

 

Mortgage default insurance rates with a non-traditional down payment - Newfoundland

Using non-traditional sources of down payments will incur a rate increase on your insurance premium for down payments from 5% - 9.99%. Non-traditional sources of down payment include borrowed funds and gifts from non-immediate family members.

Down payment (% of home’s price) 5% - 9.99% 10% - 14.99% 15%-19.99% 20% or higher
CMHC insurance premium 4.50% 3.10% 2.80% 0%


Mortgage default insurance rates for self-employed, non-verified income - Newfoundland

Self-employed home buyers without 3rd-party income validation are should be aware of additional regulations. Self-employed home buyers must pay at least 10% down payment and the insurance premiums rates on down payments from 10% - 19.99% are higher than those for regular applicants.

Down payment (% of home’s price) 5% - 9.99% 10% - 14.99% 15%-19.99% 20% or higher
CMHC insurance premium N/A 4.75% 2.90% 0%

 

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